Commerical Property Management

3 Replies

I provide property management services for the residential sector in the North Atlanta Area.  I have had several inquiries on commercial property management services and thinking about expanding my services to include commercial. 

Any advice on the following would be a huge help:

 - Fee Structure (Residential structure is 1 month rent for leasing, 8% management and $300 renewal

 - Operational items that may be different from residential.

- Legal, risk management issues that may be different from residential.

Thanks in advance for your help!!!

Fee structure and operational complexity really depends on the size of the project (# of tenants), complexity of leases (expense reimbursements.e tc) and needs of ownership (REIT accounting requirements, frequency of reporting, leasing?, etc). In the Bay Area for single tenant NNN deals owned by institutions, I see 3% of EGR as a pretty standard management fee. In general for commercial prop management, I would structure the fee as a % of base rent or EGR though.

I suggest you consult a lawyer for an answer to your legal ramification question.

Thank you for the feedback Bob!!!  This is a retail strip with 10 store fronts, half of which are vacant.

Originally posted by @Bob Thomas :

Fee structure and operational complexity really depends on the size of the project (# of tenants), complexity of leases (expense reimbursements.e tc) and needs of ownership (REIT accounting requirements, frequency of reporting, leasing?, etc). In the Bay Area for single tenant NNN deals owned by institutions, I see 3% of EGR as a pretty standard management fee. In general for commercial prop management, I would structure the fee as a % of base rent or EGR though.

I suggest you consult a lawyer for an answer to your legal ramification question.

Why would anyone/institutions pay a property management company to handle NNN properties ? That's what's awesome about NNN they run themselves pretty much.